BILL NUMBER: AB 943	CHAPTERED  09/27/00

	CHAPTER   687
	FILED WITH SECRETARY OF STATE   SEPTEMBER 27, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 25, 2000
	PASSED THE ASSEMBLY   AUGUST 31, 2000
	PASSED THE SENATE   AUGUST 24, 2000
	AMENDED IN SENATE   AUGUST 7, 2000
	AMENDED IN SENATE   JUNE 13, 2000
	AMENDED IN SENATE   APRIL 27, 2000
	AMENDED IN SENATE   MARCH 9, 2000
	AMENDED IN SENATE   MARCH 2, 2000
	AMENDED IN ASSEMBLY   JANUARY 3, 2000

INTRODUCED BY   Assembly Member Dutra
   (Principal coauthor:  Assembly Member Steinberg)

                        FEBRUARY 25, 1999

   An act to amend Sections 8855 and 53646 of the Government Code,
relating to the California Debt and Investment Advisory Commission.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 943, Dutra.  California Debt and Investment Advisory
Commission.
   (1) Existing law establishes a 9-member California Debt and
Investment Advisory Commission and prescribes the duties of that
commission, including the requirement that the commission collect,
maintain, and provide comprehensive information on all state and all
local debt authorization, sold and outstanding.  It requires the
commission to prepare an annual report compiling and detailing the
total amount of outstanding state and local public debt and examining
recent trends in the composition of that debt.
   Existing law requires the treasurer or chief fiscal officer of a
local agency to render annually a statement of investment policy to
the legislative body of the local agency, as well as to any oversight
committee.  This officer is also required to render quarterly
reports regarding the financial assets of the local agency to the
legislative body, the chief executive officer, and the internal
auditor.
   This bill would additionally require each city, county, or city
and county to submit copies of its 2nd and 4th quarterly reports, as
well as the statement of investment policy, to the California Debt
and Investment Advisory Commission.  The bill would exempt a city
from the reporting requirement if it has maintained 100% of its
investment portfolio in the county treasury, the Local Agency
Investment Fund, other specified investments, or a combination
thereof, and would exempt a county or city and county that maintained
100% of its investment portfolio in the Local Agency Investment
Fund, other specified investments, or a combination thereof.  Any
city, county, or city and county not required to submit a report
would be required to file with the commission a certification that it
is not subject to the reporting requirement.  These reporting
requirements would impose new duties on local agencies and therefore
would impose a state-mandated local program.
   This bill would require the commission to collect, maintain, and
provide information on local agency investments of public funds and
to receive local government investor portfolio information.  It would
also require the commission to report to the Legislature by May 1,
2006, its activities since the inception of the local agency
investment reporting program.
  (2) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state.  Statutory provisions establish procedures for making that
reimbursement, including the creation of a State Mandates Claims Fund
to pay the costs of mandates that do not exceed $1,000,000 statewide
and other procedures for claims whose statewide costs exceed
$1,000,000.
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 8855 of the Government Code is amended to read:

   8855.  (a) There is created the California Debt and Investment
Advisory Commission, consisting of nine members, selected as follows:

   (1) The Treasurer, or his or her designee.
   (2) The Governor or the Director of Finance.
   (3) The Controller, or his or her designee.
   (4) Two local government finance officers appointed by the
Treasurer, one each from among persons employed by a county and by a
city or a city and county of this state, experienced in the issuance
and sale of municipal bonds and nominated by associations affiliated
with these agencies.
   (5) Two Members of the Assembly appointed by the Speaker of the
Assembly.
   (6) Two Members of the Senate appointed by the Senate Committee on
Rules.
   (b) (1) The term of office of an appointed member is four years,
but appointed members serve at the pleasure of the appointing power.
In case of a vacancy for any cause, the appointing power shall make
an appointment to become effective immediately for the unexpired
term.
   (2) Any legislators appointed to the commission shall meet with
and participate in the activities of the commission to the extent
that the participation is not incompatible with their respective
positions as Members of the Legislature.  For purposes of this
chapter, the Members of the Legislature shall constitute a joint
interim legislative committee on the subject of this chapter.
   (c) The Treasurer shall serve as chairperson of the commission and
shall preside at meetings of the commission.  The commission, on or
after January 1, 1982, and annually thereafter, shall elect from its
members a vice chairperson and a secretary who shall hold office
until the next ensuing December 31 and shall continue to serve until
their respective successors are elected.
   (d) Appointed members of the commission shall not receive a
salary, but shall be entitled to a per diem allowance of fifty
dollars ($50) for each day's attendance at a meeting of the
commission not to exceed three hundred dollars ($300) in any month,
and reimbursement for expenses incurred in the performance of their
duties under this chapter, including travel and other necessary
expenses.
   (e) The commission shall do all of the following:
   (1) Assist all state financing authorities and commissions in
carrying out their responsibilities as prescribed by law, including
assistance with respect to federal legislation pending in Congress.
   (2) Upon request of any state or local government units, to assist
them in the planning, preparation, marketing, and sale of new debt
issues to reduce cost and to assist in protecting the issuer's
credit.
   (3) Collect, maintain, and provide comprehensive information on
all state and all local debt authorization, sold and outstanding, and
serve as a statistical clearinghouse for all state and local debt
issues.  This information shall be readily available upon request by
any public official or any member of the public.
   (4) Maintain contact with state and municipal bond issuers,
underwriters, credit rating agencies, investors, and others to
improve the market for state and local government debt issues.
   (5) Undertake or commission studies on methods to reduce the costs
and improve credit ratings of state and local issues.
   (6) Recommend changes in state laws and local practices to improve
the sale and servicing of state and local debts.
   (7) Establish a continuing education program for local officials
having direct or supervisory responsibility over municipal
investments, and undertake other activities conducive to the
disclosure of investment practices and strategies for oversight
purposes.
   (8) Collect, maintain, and provide information on local agency
investments of public funds for local agency investment.
   (f) The city, county, or city and county investor of any public
funds, no later than 60 days after the close of the second and fourth
quarters of each calendar year, shall provide the quarterly reports
required pursuant to Section 53646 and, no later than 60 days after
the close of the quarter of each calendar year and 60 days after the
subsequent amendment thereto, provide the statement of investment
policy required pursuant to Section 53646, to the commission by mail,
postage prepaid, or by any other method approved by the commission.
The commission shall collect these reports to further its
educational responsibilities as described under subdivision (e).
Nothing in this section shall be construed to create additional
oversight responsibility for the commission or any of its members.
Sole responsibility for control, oversight, and accountability of
local investment decisions shall remain with local officials.  The
commission shall not be considered to have any fiduciary duty with
respect to any local agency income report received under this
subdivision.  In addition, the commission shall not have any legal
liability with respect to these investments.
   (g) The commission may adopt bylaws for the regulation of its
affairs and the conduct of its business.
   (h) The issuer of any proposed new debt issue of state or local
government shall, no later than 30 days prior to the sale of any debt
issue at public or private sale, give written notice of the proposed
sale to the commission, by mail, postage prepaid.  This subdivision
shall also apply to any nonprofit public benefit corporation
incorporated for the purpose of acquiring student loans.
   (i) The notice shall include the proposed sale date, the name of
the issuer, the type of debt issue, and the estimated principal
amount thereof.  Failure to give this notice shall not affect the
validity of the sale.
   (j) The issuer of any new debt issue of state or local government,
not later than 45 days after the signing of the bond purchase
contract in a negotiated or private financing, or after the
acceptance of a bid in a competitive offering, shall submit a report
of final sale to the commission by mail, postage prepaid, or by any
other method approved by the commission.  A copy of the final
official statement for the issue shall accompany the report of final
sale.  The commission may require information to be submitted in the
report of final sale that it considers appropriate.
   (k) The commission shall publish a monthly newsletter describing
and evaluating the operations of the commission during the preceding
month.
   (l) The commission shall meet on the call of the chairperson, or
at the request of a majority of the members, or at the request of the
Governor.  A majority of all nonlegislative members of the
commission constitutes a quorum for the transaction of business.
   (m) All administrative and clerical assistance required by the
commission shall be furnished by the office of the Treasurer.
   (n) The commission, no later than May 1, 2006, shall report to the
Legislature describing its activities since the inception of the
local agency investment reporting program regarding the collection
and maintenance of information on local agency investment practices
and how the commission uses that information to fulfill its statutory
goals.
  SEC. 2.  Section 53646 of the Government Code is amended to read:
   53646.  (a) (1) In the case of county government, the treasurer
shall annually render to the board of supervisors and any oversight
committee a statement of investment policy, which the board shall
review and approve at a public meeting.  Any change in the policy
shall also be reviewed and approved by the board at a public meeting.

   (2) In the case of any other local agency, the treasurer or chief
fiscal officer of the local agency shall annually render to the
legislative body of that local agency and any oversight committee of
that local agency a statement of investment policy, which the
legislative body of the local agency shall consider at a public
meeting.  Any change in the policy shall also be considered by the
legislative body of the local agency at a public meeting.
   (b) (1) The treasurer or chief fiscal officer shall render a
quarterly report to the chief executive officer, the internal
auditor, and the legislative body of the local agency.  The quarterly
report shall be so submitted within 30 days following the end of the
quarter covered by the report.  Except as provided in subdivisions
(e) and (f), this report shall include the type of investment,
issuer, date of maturity par and dollar amount invested on all
securities, investments and moneys held by the local agency, and
shall additionally include a description of any of the local agency's
funds, investments, or programs, that are under the management of
contracted parties, including lending programs.  With respect to all
securities held by the local agency, and under management of any
outside party that is not also a local agency or the State of
California Local Agency Investment Fund, the report shall also
include a current market value as of the date of the report, and
shall include the source of this same valuation.
   (2) The quarterly report shall state compliance of the portfolio
to the statement of investment policy, or manner in which the
portfolio is not in compliance.
   (3) The quarterly report shall include a statement denoting the
ability of the local agency to meet its pool's expenditure
requirements for the next six months, or provide an explanation as to
why sufficient money shall, or may, not be available.
   (4) In the quarterly report, a subsidiary ledger of investments
may be used in accordance with accepted accounting practices.
   (c) Pursuant to subdivision (b), the treasurer or chief fiscal
officer shall report whatever additional information or data may be
required by the legislative body of the local agency.
   (d) The legislative body of a local agency may elect to require
the report specified in subdivision (b) to be made on a monthly basis
instead of quarterly.
   (e) For local agency investments that have been placed in the
Local Agency Investment Fund, created by Section 16429.1, in National
Credit Union Share Insurance Fund-insured accounts in a credit
union, in accounts insured or guaranteed pursuant to Section 14858 of
the Financial Code, or in Federal Deposit Insurance
Corporation-insured accounts in a bank or savings and loan
association, in a county investment pool, or any combination of
these, the treasurer or chief fiscal officer may supply to the
governing body, chief executive officer, and the auditor of the local
agency the most recent statement or statements received by the local
agency from these institutions in lieu of the information required
by paragraph (1) of subdivision (b) regarding investments in these
institutions.
   (f) The treasurer or chief fiscal officer shall not be required to
render a quarterly report, as required by subdivision (b), to a
legislative body or any oversight committee of a school district or
county office of education for securities, investments, or moneys
held by the school district or county office of education in
individual accounts that are less than twenty-five thousand dollars
($25,000).
   (g) Except as provided in subdivisions (h) and (i), each city,
county, or city and county shall submit copies of its second and
fourth quarter reports to the California Debt and Investment Advisory
Commission within 60 days after the close of the second and fourth
quarters of each calendar year.  Any city, county, or city and county
not required to submit a report pursuant to subdivision (h) or (i)
shall file with the commission a certification within 60 days of the
end of the second and fourth quarters of the calendar year stating
the distribution and amount of its investment portfolio and that it
is therefore not subject to this reporting requirement.  This
subdivision shall become inoperative on January 1, 2007.
   (h) A city shall not be required to submit a quarterly report to
the commission if, during the entire reporting period, the city has
maintained 100 percent of its investment portfolio in (1) the
treasury of the county in which it is located for investment by the
county treasurer pursuant to Section 53684, (2) the Local Agency
Investment Fund created by Section 16429.1, (3) National Credit Union
Share Insurance Fund-insured accounts in a credit union, in accounts
insured or guaranteed pursuant to Section 14858 of the Financial
Code, or in Federal Deposit Insurance Corporation-insured accounts in
a bank or savings and loan association, or (4) in any combination of
these.
   (i) A county or city and county shall not be required to submit a
quarterly report to the commission if, during the entire reporting
period, the county has maintained 100 percent of its investment
portfolio in (1) the Local Agency Investment Fund created by Section
16429.1, (2) National Credit Union Share Insurance Fund-insured
accounts in a credit union, in accounts insured or guaranteed
pursuant to Section 14858 of the Financial Code, or in Federal
Deposit Insurance Corporation-insured accounts in a bank or savings
and loan association, or (3) in any combination of these.
  SEC. 3.  Notwithstanding Section 17610 of the Government Code, if
the Commission on State Mandates determines that this act contains
costs mandated by the state, reimbursement to local agencies and
school districts for those costs shall be made pursuant to Part 7
(commencing with Section 17500) of Division 4 of Title 2 of the
Government Code.  If the statewide cost of the claim for
reimbursement does not exceed one million dollars ($1,000,000),
reimbursement shall be made from the State Mandates Claims Fund.
